Created by the Resource Center
Contact theWebmasterLast Updated: 1/21/2010

Garrett County Board of Education
40 South Second Street
Oakland, MD 21550
(301)334-8900

SCHOOL ACTIVITY
FUNDS

Administrative Procedure

The accounting practices
and procedures prescribed in this procedure represent minimum requirements for
the operation of School Activity Funds in each school

1.Transaction
Journal

A
transaction (receipts and disbursements) journal is to be maintained for each
fund established at a school to record all receipts and disbursements of each
fund. A cash control/balance column must be maintained to reflect the cash
balance available at any time in each fund.

2. Bank Accounts

Each school must maintain a bank account. Bank signature cards for individuals
that have signature authority of local bank account must be maintained current
at all times. All such agreements shall require two signatures on checks.

3.Receipts

All funds collected must be deposited intact in a bank depository account.
Receipts must be indicated or attached to bank deposits

4.Disbursements

All disbursements must be made by check. Checks are not to be made payable to
cash. If starting cash is needed for an event from which to make change, the
check must be payable to the individual who will be cashing the check.

a. Itemized Claim for
Payment

Schools are not permitted to expend any funds unless an itemized claim (invoice)
for payment is filed by the claimant. If the claim is for services rendered by
an independent contractor, the invoice must identify the kind of service, the
date performed, the person performing the service and the amount due. If the
claim is for materials, equipment or supplies, the invoice must identify in
detail the vendor, the items provided, the quantity, the date provided, to whom
provided, and the amount due. Schools are exempt from the payment of consumer
sales tax on all purchases of good and services and shall not pay or reimburse
for sales tax.

b.Reimbursement
of Travel Expenses

(1)Employees

Schools may reimburse employees for all reasonable and necessary travel expenses
actually incurred in the performance of their official duties upon presentation
of an itemized statement signed by the employee and approved by the principal.
Such reimbursements, however, are subject to the policies, procedures, and
limitations prescribed by the county board of education.

(2)Schools

Schools may also pay reasonable and necessary travel expenses actually incurred
by the students on trips authorized by the principal or designee. Such payments
are to be supported by an itemized statement which lists the date and purpose of
the trip, the names of all students and chaperones on the trip and the amounts
paid. If funds are paid to students in order that they may pay their own
expenses, each studentís signature is to be obtained as verification of receipt
of the funds. If payment is made directly to a vendor, such as to a motel or
restaurant, receipts must be obtained to support the disbursement.

5.Payment
for Personal Services

All payments made by a school to an individual for services rendered are to be
considered wages and are to be paid through the normal payroll process at the
central office, unless it can be clearly shown that the individual is an
independent contractor in accordance with the criteria established by the
Internal Revenue Service.

6.Reconciliation
of Bank Statements

All bank statements are to be presented to the school principal unopened as soon
as they are received through the mail. The principal is to open the envelopes
and review the bank statements for any possible irregularities, such as checks
made to cash or unauthorized individuals. After this review the bank statements
and canceled checks or images of the canceled checks shall be forwarded to the
individual who will be preparing the bank reconciliations. Every bank account
must be reconciled monthly as soon as possible after the bank statements are
received.

7.Gate
Receipts

Pre-numbered tickets are to be used at any school event where an admission fee
is charged or a donation is accepted for admittance. As tickets are collected
from patrons, they should be torn in half; one-half should be returned to the
individual and the other half should be retained. A ticket reconciliation
report must be prepared for each event to reconcile tickets sold to cash
collected. The report must show the following: beginning cash balance; first
and last numbers of each type of ticket sold (student, adult, other); total
number of tickets sold by type; price of each type of ticket; total sales;
ending cash balance; total cash in cash box; and differences, if any. In
addition, total sales from tickets sold prior to the event must be shown. The
reconciliation report must also show the activity and date, and must be signed
by the preparer and the principal, assistant principal, or athletic director.

8.Fund
Raisers

All proceeds from fund raisers conducted by a school are to be deposited
intact. Merchandise purchased for resale is to be purchased by checks issued
for that purpose. The purchase invoices are to be retained as supporting
documentation for the disbursements. A profit and loss statement must be
prepared for each fund raising activity conducted by a school that shows gross
proceeds, cost of goods sold and net proceeds. When items are sold, the Fund
Raising Inventory Reconciliation Form must also be completed.